The company does not pay its shareholders a dividend.
This micro-cap technology stock, with a market capitalization of $92-million, is covered by seven analysts – six analysts have “buy” recommendations and one analyst (at Echelon Wealth Partners) has a “speculative buy” recommendation.
The seven firms providing research coverage are as follows in alphabetical order: Beacon Securities, Echelon Wealth Partners, Eight Capital, GMP, Haywood Securities, Mackie Research Capital, and PI Financial Corp.
Analysts’ expectations have been rising.
In February, analyst Eyal Ofir from Eight Capital raised his target price to $3.15 from $2.85. Justin Keywood from GMP tweaked his target price higher by 25 cents to $2.75. Pardeep Sangha, the analyst from Haywood Securities, raised his target price to $4.25 from $3.75. Robert Goff, the analyst from Echelon Wealth Partners, lifted his target price to $3.60 from $3.40, and David Kwan from PI Financial increased his target price to $2.85 from $2.50.
The Street is forecasting revenue of $40-million in 2017 rising to $52-million in 2018. The consensus EBITDA estimate is $0.7-million in 2017 and anticipated to climb to $7.1-million in 2018. The company is expected to be profitable in 2018, reporting earnings per share of 10 cents for the year.
According to Bloomberg, the stock is trading at an enterprise value-to-sales multiple of 0.9 times the consensus 2018 estimate, slightly below its three-year historical average of 1.2 times.
The average 12-month target price is $3.44, implying the share price has 37 per cent upside potential over the next year. Individual target prices are as follows in numerical order: $2.75, $2.85, $3.15, $3.50, $3.60, and $4.25. These target prices suggest upside potential of between 10 per cent and 69 per cent.
Insider transaction activity
There have been no reported buying or selling activities by insiders in 2017.
Since late-2015, the share price has traded predominately between $1.75 and $2.50, with large price swings within this trading range. This is a stock for investors who can tolerate a high degree of price volatility.
Year to date, the stock price has rallied 13 per cent; however, it has been a volatile ride for shareholders. For instance, on March 15, the stock price closed at $2.72 with the share price subsequently declining 21 per cent to close at $2.15 on April 21. Over the past six trading sessions, the share price has rallied 17 per cent to close at $2.51 on May 1.
The stock price has upside resistance around $2.75, and after that between $3 and $3.30.
Looking at the downside risk, there is technical support around $2.50, which is close to its 50-day moving average (at $2.41). Failing that, there is strong support around $2, close to its 200-day moving average (at $2.13).
The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company’s dividend policy, analysts’ recommendations, and provides a brief technical analysis for a security to provide readers with more information.
If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.
Securities screened are from the S&P/TSX composite index, the S&P/TSX Small Cap index, as well as Canadian small cap stocks outside of these indexes that have a minimum market capitalization of $200-million.
A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.
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